sebi:EAD-6/PM-AB/62/2018-19

SEBI · SEBI · 2018-04-03 · Prasanta Mahapatra, Adjudicating Officer

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Violation established; penalty of Rs. 18,00,000 imposed ex-parte

Provisions invoked

• s. 15
• s. 15H
• s. 15I
• s. 15J

Regulations

• Reg. 3
• Reg. 2(1)(c)
• Reg. 4(1)
• Reg. 3(a)
• Reg. 4(2)(a)
• Reg. 2(1)(c)(2)
• Reg. 2(1)(c)(7)
• Reg. 2(1)(c)(8)

Holding

The Noticee violated Regulations 3(a), 4(1) and 4(2)(a) of the PFUTP Regulations by executing non-genuine reversal trades in illiquid BSE Stock Options, and is liable to monetary penalty of Rs. 18,00,000 under Section 15HA of the SEBI Act.

Full text

Adjudication Order in the matter of dealing in Illiquid Stock Options at the BSE Page 2 of 15 allegations that the Noticee had violated Regulation 3(a), (b), (c), (d) and Regulation 4(1), 4(2) (a) of the SEBI (Prohibition of Fraudulent and Unfair Trading Practices related to Securities Markets) Regulations, 2003 (hereinafter be referred to as, the “PFUTP Regulations”).

Adjudication Order in the matter of dealing in Illiquid Stock Options at the BSE Page 3 of 15 c) The trades entered by the Noticee were reversed on the same day with same counterparties at a substantial price difference without any basis for significant change in the contract price which indicates that these trades are artificial and are non-genuine in nature. d) A summary of dealings of the Noticee in the 79 Stock Options contracts in which the Noticee executed non-genuine reversal trades during the Investigation Period are as under: Table 1: Summary of trading of the Noticee in Illiquid Stock Options on BSE

Adjudication Order in the matter of dealing in Illiquid Stock Options at the BSE Page 4 of 15 17 DISH15MAR85.00PE 3.25 276000 7.05 276000 7% 10% 18 DLFL14NOV130.00CE 5.87 132000 13.40 132000 29% 24% 19 EXID15MAR155.00CE 16.85 74000 24.95 74000 14% 9% 20 GMRI14DEC24.00CE 0.05 280000 1.50 280000 50% 48% 21 GMRI14DEC26.00CEW3 0.05 510000 1.29 510000 23% 46% 22 GMRI15JAN10.00PEW4 0.05 171000 1.55 171000 18% 21% 23 GMRI15JAN12.00PE 0.05 324000 1.40 324000 14% 8% 24 GMRI15JAN14.00PEW4 0.05 81000 1.40 81000 13% 5% 25 HDIL15FEB110.00PE 0.50 108000 6.50 108000 17% 12% 26 HDIL15FEB110.00PEW3 0.10 204000 7.70 204000 20% 38% 27 HDIL15FEB95.00CEW1 9.10 168000 19.10 168000 17% 61% 28 IBRL14DEC105.00CEW2 0.05 100000 2.80 100000 33% 25% 29 IBRL15JAN55.00PEW2 0.05 156000 3.35 156000 100% 100% 30 IDBI15FEB70.00PE 1.35 76000 3.35 76000 18% 7% 31 INCM15FEB105.00CEW1 4.35 6000 10.10 6000 22% 1% 32 IOBL14DEC70.00CEW2 0.05 204000 2.90 204000 33% 51% 33 IOBL14DEC70.00CEW3 0.05 176000 2.75 176000 60% 98% 34 IOBL14DEC80.00CEW2 0.05 204000 2.89 204000 100% 100% 35 IOBL15JAN50.00PEW2 0.05 204000 3.25 204000 15% 22% 36 JAIA15JAN18.00PEW3 0.05 400000 1.85 400000 22% 26% 37 JAIA15JAN20.00PEW3 0.05 400000 1.85 400000 29% 38% 38 JISL14DEC95.00CE 0.05 72000 2.10 72000 60% 42% 39 JISL15JAN65.00CEW4 0.20 180000 2.15 180000 100% 100% 40 JISL15MAR75.00PEW2 0.85 460000 4.10 460000 56% 43% 41 JPPW14DEC8.00PEW3 0.05 690000 1.27 690000 56% 61% 42 JPPW15FEB12.00CEW2 0.13 705000 1.83 705000 40% 81% 43 JPPW15FEB14.00CEW

Source: SecMarx — sebi:EAD-6/PM-AB/62/2018-19. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.